What are my options if I owe the IRS and cannot pay?
There are five main tools. Which one fits depends on how much you owe, what you earn, what you own and whether every return is filed.
- Short-term payment plan. Pay the full balance within 180 days. The IRS charges no setup fee, though penalties and interest keep running until it is paid (IRS payment plans).
- Long-term payment plan (installment agreement). Monthly payments. Individuals who owe $50,000 or less and have filed every required return can apply online; the online setup fee is $29 with direct debit and $69 without (IRS payment plans).
- Offer in Compromise. Settle for less than the full amount when paying in full would not be possible or would cause hardship. See our Offer in Compromise page.
- Currently Not Collectible status. The IRS pauses most collection while you cannot pay. The debt stays, and penalties and interest keep adding up (IRS: temporarily delay collection).
- Penalty relief. First Time Abate, reasonable cause, and from summer 2026 the new Automatic Exemption from Penalty (IRS administrative penalty relief).
Our side-by-side comparison of IRS relief options lays out the costs and trade-offs of each in one table.
Does asking for a payment plan stop the IRS from taking money?
With some exceptions, yes. The IRS says it is generally prohibited from levying while an installment agreement request is pending, while a plan is in effect, for 30 days after a request is rejected or terminated, and while an appeal of that decision is open (IRS payment plans FAQ). That is why getting a proper request in early matters more than getting it perfect.
Can I really settle with the IRS for less?
Sometimes. An Offer in Compromise is a real IRS program, but the IRS says plainly that it generally will not accept an offer if you could pay the debt through a payment plan or from equity in your assets (IRS: Offer in Compromise). We run your numbers before you pay any IRS application fee, and if a plan is the better route we tell you so.